Daily Chart Art – February 18, 2010

Is the EURUSD forming a range? It sure looks like it, as price found some significant selling pressures at the 1.3800 region yesterday, around last week’s high. Now that the pair is currently testing support at the bottom of the range, would we see price bounce and head higher again? Stochastics is about to hit oversold territory, indicating that an upward move is likely. On the other hand, if support breaks and a 4-hour candle manages to close below it, the EURUSD could head towards 1.3500 before finding buying support.

USDCAD: Daily

Now let’s move on to the USDCAD daily chart. After six days of losing, it looks like the pair is finally going to get some buying support at 1.0400. I say this because price has bounced repeatedly around this price level in the past. Stochastics also indicate conditions are oversold, hinting that the pair could possibly swing higher. If today’s daily candle manages to close above yesterday’s high, watch out for a move towards 1.0600. However, if price manages to bust through yesterday’s low, the pair could fall to 1.0225, the next major support level.

GBPUSD: 1-Hour

Lastly, let’s end with an update on the GBPUSD. Yesterday, I pointed out that the pair had broken past resistance. However, the price action’s life above the resistance was short lived as the pair has now retraced and is sitting on top of the rising trendline. With bullish divergence forming and stochastic indicating oversold conditions, could we see the pair shoot higher? If support holds, we could see the pair retest yesterday’s highs just above 1.5800. On the other hand, if selling pressure remains strong, we could see the pair break the trendline support and fall all the way down to yearly lows at 1.5550.

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